IoD Wales: Skills shortages worry
By Andy Pearson
IoD Wales director Robert Lloyd Griffiths today calls on the UK Government to scale back business taxes and employment regulation so that firms have more resources to invest in training.
As the IoD’s latest skills survey reveals that the growth of nearly 60 per cent of UK businesses is being held back by a lack of skills, Mr Griffiths calls the Government’s Time to Train policy “misguided.”
The policy gives employees the right to request time to undertake study or training. But Mr Griffiths said it increased the regulatory burden on business and undermined existing good practice in workplace training.
Mr Griffiths also flagged up Wales’ numeracy and literacy levels as a key concern. They are low by UK standards.
Disturbing
He said: “It is disturbing that at a time of economic weakness, the growth of the private sector is being held back by skills shortages.
“Businesses want to invest in training and are doing so on a large scale already, but they would invest even more if the Government took some radical steps to deliver a better overall business environment.
“Excessive employment regulation and an uncompetitive tax system effectively eat up resources that businesses could use to fund training.
“The Government needs to put more emphasis on sorting out these problems if it wants to tackle skills shortages. The biggest barrier to greater employer investment in training is a lack of resource, not a lack of law. Time to Train, for instance, is misguided.”
IoD survey results
Skills shortages
- 31 per cent of employers were struggling to fill vacancies in their workforce. This was primarily due to a shortage of applicants with the required skills: 74 per cent of those with hard-to-fill vacancies blamed a lack of candidates with the appropriate skills, qualifications or experience. The hardest skills to source have been technical skills, management and leadership skills, and customer service skills.
- Overall, therefore, 23 per cent of IoD members’ organisations surveyed had so-called “skills shortage vacancies”: vacancies proving hard to fill because of a lack of skilled applicants.
Skills gaps
- Even more significant than skills-related recruitment difficulties are skills weaknesses in organisations’ existing workforces – so-called skills gaps. 47 per cent of the directors surveyed said that some of their organisation’s employees lacked the skills needed to do their job to the required level.
- On average, organisations reporting skills gaps estimated that 24 per cent of their employees lacked the skills they required. Organisations affected by skills gaps identified management skills and leadership skills as being in particular need of improvement.
Business impact
- Employee skills gaps are wreaking considerable damage on businesses. 58 per cent of employers reported that skills gaps were holding back the growth of their firms. This damage also comes in the form of higher operational costs (reported 32 per cent of employers), compromised quality (34 per cent), lost orders (25 per cent), stifled innovation (33 per cent) and increased workloads for other employees (61 per cent).
Training
- IoD members’ organisations have an impressive training record with 94 per cent investing in training. Denouncing employers’ failure to train, and pronouncing their consequent culpability for the nation’s skills problems, are both familiar refrains. It would be tempting to assume, given the severity of the skills problems described above, that businesses have a training blind spot. In reality, the survey evidence shows the reverse is true. This is not surprising: skills shortages and skills gaps can serve as a significant spur to train.
- During the recession employers have maintained a robust commitment to training, debunking the myth that the training budget is always “the first to be cut” in a downturn. Assessing the impact of the recession: 72 per cent of those organisations providing training said expenditure on training per employee had either stayed the same (52 per cent) or increased (20 per cent). 22 per cent said it had decreased.
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